Sunday, February 17, 2013

Maker's Mark on Proof Change: "Never Mind"

One week after announcing that it is cutting its proof from 90° to 84°, Maker's Mark and Beam Inc. have decided it was all a bad dream. The people have spoken, the proof cut is off.

I know what you're thinking and, of course, we'll never know for sure, just as we never knew with New Coke.

I was at my neighborhood Jewel-Osco store last night and noticed the Maker's Mark section was pretty bare.

Anyway, here's the spin...I mean, announcement:

"Since we announced our decision last week to reduce the alcohol content (ABV) in Maker's Mark in response to supply constraints, we have heard many concerns and questions from our ambassadors and brand fans. We're humbled by your overwhelming response and passion for Maker's Mark. While we thought we were doing what's right, this is your brand - and you told us in large numbers to change our decision.

"You spoke. We listened. And we're sincerely sorry we let you down.

"So effective immediately, we are reversing our decision to lower the ABV of Maker's Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we've made it since the very beginning.

"The unanticipated dramatic growth rate of Maker's Mark is a good problem to have, and we appreciate some of you telling us you'd even put up with occasional shortages. We promise we'll deal with them as best we can, as we work to expand capacity at the distillery.

"Your trust, loyalty and passion are what's most important. We realize we can't lose sight of that. Thanks for your honesty and for reminding us what makes Maker's Mark, and its fans, so special.

"We'll set about getting back to bottling the handcrafted bourbon that our father/grandfather, Bill Samuels, Sr. created. Same recipe. Same production process. Same product.

"As always, we will continue to let you know first about developments at the distillery. In the meantime please keep telling us what's on your mind and come down and visit us at the distillery. It means a lot to us.

13 comments:

jdl
said...

I was surprised when they announced the lowering, but willing to try it and to see if there was a difference. Then I was surprised when Makers said that the lowering would be permanent and not just for the shortage. And now all never mind. This is a lot to handle in a week.

As usual the spin is nice but there will be a lingering stench of cynical marketing/brand pumping/news making. The suckers (I mean consumers) who ran out to collect the "last" of the 90's wil feel hard done by. (Raises hand).

Either way, this is a step in the right direction which will at least set a president for those who want to make a change of their product in the future. You wonder what distilleries like Wild Turkey and JD are thinking now, with some of their past and future changes.

I think the simplest answer is most likely: the company was scared to increase price so they tried a different avenue, the same one that Jack Daniels pulled off in '02. But social media, which didn't exist back when Jack lowered ABV, prevailed on this one. MM and the Samuels family probably weren't expecting this much interest, and I think that they realized that they made a mistake. And it was a mistake because so many people jumped on the story and spread the word that this was a mistake.

The difference between MM and Coke is massive so the comparison isn't apt. Coke was the industry leader whereas MM is one of very many different bourbon producers. I don't think MM would have knowingly taken such a risk.

One interesting thing they did learn though: that customers will *beg* a company whose product they love to raise prices rather than dilute the integrity of the product. I think that's something that could only happen in the adult beverages industry.

A deeper sociological question is why do people hold their beers and liquors and wines to these high standards compared to all of the other products we consume?

This has more to do with share prices than anything else. Most of these companies are thought to be over bought by the markets.Investment will slow as no one wants to get in at the top. The thought of watering down whiskey to sell more at the same price may seem terrible to a whiskey lover but to an investor it is music to his ears. To investors it is not about maintaining profits which translates into dead money it is about exceeding growth of profits year over year and when it looks like that is no longer possible investors pull their money and millions if not billions of dollars leave a company regardless of steady sales. Therefore i don't think we have seen the last of this type of thing regardless of company and brand (if publicly traded). New launches will begin at lower proofs to show easier growth of margins and this will not be limited to the world of spirits you will see dilution everywhere there is market cap to be protected